Fitch cuts Yancoal to negative

Fitch Ratings said it revised Yanzhou Coal Mining Co. Ltd.'s (Yancoal) outlook to negative from stable.

The agency also said it affirmed the company's long-term issuer default rating at BBB-, along with the BBB- rating on the dual tranche $1 billion notes issued by Yancoal International Resources Development Co.,Ltd. and guaranteed by Yancoal.

The negative outlook reflects Yancoal's weakened credit metrics due to deteriorating coal market conditions since the third quarter of 2012, Fitch said.

The company's earnings in 2012 were affected by its acquisition of Gloucester Coal in Australia and related integration costs, the agency said.

Fitch said it is of the view that Yancoal's credit metrics are unlikely to recover to levels that are comfortable with its current ratings before 2015, given the expectations for low coal prices and remaining acquisition-related payments in 2013.

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